A Value-Added Tax (VAT) number is a unique identifier assigned to businesses that are registered for VAT purposes. It is used to identify businesses and track their VAT transactions. For instance, a business in the United Kingdom with a VAT number of GB123456789 would be required to display it on invoices and other documents.
VAT numbers are essential for businesses that trade across borders within the European Union (EU). They allow businesses to charge and reclaim VAT correctly, ensuring compliance with EU VAT regulations. The introduction of a single VAT system within the EU (known as the EU VAT Directive) in 1993 has significantly simplified VAT compliance for businesses operating in multiple EU countries.
